What to Expect on Health Care in Obama's Second Term

The Affordable Care act is still unpopular, its path to implementation still bumpy. But this much is now certain: It will remain the law of the land.

Without a Republican president to slow the law’s implementation or a GOP Senate to dismantle it, there will be nothing to stop Obama’s signature health reform act before 2014, when its major provisions kick in. Even if Republicans win decisive control of Washington in four years with a clear mandate for health reform, they will be working with a new status quo. “We have one overarching reality: that the Affordable Care Act is the law,” says Paul Keckley, the executive director of the Deloitte Center for Health Solutions, a major industry consultancy.

In the health care sector, that’s actually not monumental news; businesses have long assumed that the Affordable Care Act will move forward. Providers and insurers have been steadily adjusting to the shifting landscape, where financial incentives will be different and profit margins will likely be tighter. Several years of slower-than-usual growth in health care spending may indicate that changes encouraged by the law are already having an effect—although it’s early to know whether the trends will last.

Obama’s reelection does end a high level of political uncertainty. Romney ran on a platform of total repeal, even if he softened in supporting some provisions in the final weeks of the campaign. House Republicans have voted twice to repeal the law; they will now need a new health care platform if they want a role in shaping policy. And it’s a decision point for state politicians: Many have held back on building the insurance exchanges or deciding whether to expand their Medicaid programs. First they waited until the Supreme Court ruled. Then they waited for the elections.

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Now, governors and state legislators will need to decide—and quickly—whether they’ll cooperate or continue fighting on ideological grounds. “It’s going to sink in that it’s the law of the land; the ACA is not going anywhere, and I think you’re going to see most states saying that they would rather control their own market,” says Heather Howard, the director of the State Health Reform Assistance Network at Princeton University, which is helping 10 states with implementation. “I think you’ll see more states moving.”

None of which means that the Affordable Care Act is immutable. The president has promised a $4 trillion deficit-reduction package—a goal that is basically impossible to reach without cuts to the major health entitlement programs. The next year could see bipartisan proposals to cut Medicare, Medicaid, and subsidies for middle-income Americans on insurance exchanges. Still, even those changes would live within the basic framework of “Obamacare.” It is the new normal.